You get eco-labels on everything these days. You can't grab a coffee without it being rainforest-certified, fair-trade, organic or all three. This very ubiquity bothers me - are all these products wonderful, or is the bar too low and do labels continue to challenge industry to strive harder?
Even the most successful of the eco-labels - the EU energy label on white goods which drove up energy efficiency dramatically - has a fatal flaw. Instead of cranking up the ratings so it was more difficult to meet them, the EU simply added ratings to the top end - A+, A++ etc. So a fridge that hit A in 2000 will still be ranked A in 2020 - where's the drive to improve or ditch old and under-performing technologies?
More worrying was a conversation I had with a sustainability manager at a major multinational last week (not one of our clients). He said something along the lines of:
We lobby to make sure the eco-label is something we can achieve, then we meet that target and no more - there's no pressure to exceed the standard.
In other words, industry tries to dictate what "green" means, makes sure it is easily achievable and then, bingo, achieves it! And sits back, job done.
Such lowest common denominator thinking exasperates me. We need to be creating powerful drivers to make industry strive forwards, not sit on their (modest) laurels. The rankings in all eco-labels should be designed to tighten over time to keep people on their toes. If there is no fear of losing the label, then it is worthless.
An alternative approach is the league table. Industry loves competition and hates to come last - certainly the Greenpeace ranking of electronics firms made even Steve Jobs sit up and listen. A comprehensive set of rankings across sectors would really spice up progress to sustainability.
Whatever is done needs to be done quickly - very soon the public is going to notice that almost everything has a label of some sort. And if they get cynical, the eco-label won't be worth the product packaging it is printed on.
I had to make a 'repair or upgrade?' decision on my 4 year old MacBook Pro a couple of months ago. The latest model had only marginally better performance stats, so I went for the repair. I can't imagine that happening 10 years ago.
My dad asked me how old my car was. Ten years I answered. Blimey, he said, think what a typical 10 year old car would have looked like 20 years ago - it would have been a bucket of rust.
There was a story in the press that PC sales are down, particularly bulk purchases. As tablets tend to be bought in addition to desktops or laptops, this was puzzling the journalist - maybe the economic downturn was to blame. My reaction was unlikely - did companies ever upgrade their IT on a whim?
Product life cycles are interesting things. Most products are disposed of long before they physically wear out, but rather when they fall out of fashion. This is the (in)famous "planned obsolescence" - a term coined in 1954 by Brooks Stevens and defined as "instilling in the buyer the desire to own something a little newer, a little better, a little sooner than is necessary." It could be argued that planned obsolescence is at the heart of modern consumer driven society.
But is this changing? With smartphones now able to handle video conferencing and bog standard PCs able to do what used to be thought of as heavy lifting like video editing, what would you upgrade to do? My 10 year old car doesn't look very old fashioned the way a 70's car would have looked in the 80's. In the last few years Governments around the world have had to resort to stimulating new car purchases through scrappage schemes - effectively bribing people to buy a new car. Even in the building trade, old buildings are being 'repurposed' and classic facades are being retained in new developments.
I've done a bit of Googling, but can't find any hard and fast data on product life trends. But if they are lengthening then it is (usually*) a good thing for the environment, but it will require a different approach to business models. The real money could be found in maintenance, added functionality (eg Apps) and support rather than hoping your customer base will fall out of love with the stuff they have and buy something new.
* The only downside is that you stay wedded to with current technology - eg petrol cars when you may want a shift to zero emission vehicles.
Yesterday I was a panelist at the "Chasing the Green Pound" event hosted by Grayling's Future Planet team. It was a strong line-up with Ramon Arratia from Interface, Per Bogstad of Rainforest Alliance, Esther Maughan McLachlan of Sony Europe and yours truly, all chaired by Jo Cofino who heads up Guardian Sustainable Business.
Here are some of the points I took away with me:
The archetypal green consumer who will compromise on price and/or performance to 'save the planet' remains in a minority;
Retailers are doing the heavy lifting on behalf of the consumer by demanding good quality greener mainstream products from suppliers;
They do this for overall brand enhancement rather than to target green consumers per se;
Green product producers love legislation that penalises their less enlightened competition;
Product labels like the EU energy label can drive consumer buying patterns, but they need rapid updating to keep ahead of technology;
Long life products require new business models - Sony are actively investigating the concept of a 'multi-functional digital device for life' and what business model might support it;
In terms of changing how consumers use products, we have limited bandwidth to communicate with them and should use it wisely;
Nudge techniques may help - making greener behaviour the easier path eg a washing machine that defaults to a cooler wash cycle rather than sticking with the temperature of the previous wash;
Consumer resistance may provide business opportunities - the example was given of a company that empties lofts for free (and makes cash out of selling the contents) - this is one of the barriers to improving domestic insulation.
At the end, Jo asked us to look forward and predict future trends in consumer behaviour. I suggested that the shift from owning huge amounts of media (books, CDs, DVDs) to accessing the data directly (ebooks, MP3s, movies on demand) was eroding the 'status of stuff' - our bizarre pride in the wall of books/CDs/DVDs in the living room - and this may open all sorts of opportunities for mainstreaming lightweight and/or collaborative consumption such as Spotify, ZipCar, Airbnb etc. On a grand scale, this would free us to enjoy the experiences we are used to with a fraction of the ecological footprint of the physical product-based economy.
I'm writing this on the East Coast Mainline, charging across the frozen fields of eastern England as the sun casts various tints of orange across the monochrome landscape. I'm on my way down to the bright lights of London to take part on a webinar about engaging customers on how to use your products and services in a greener way. The event is organised by BusinessGreen.com, sponsored by Accor and also includes Marks & Spencer, so I'm in pretty good company.
If you read this in time, you can still sign up here - I'll post a summary on Wednesday for all those who missed it!
Just to give some background - customer engagement is one of the three big challenges for green business I identified back in December. Effectively all those green collar jobs everyone hopes says will emerge from the green economy will be delivering products and services which allow others to go greener. This is the top level of the business case model in my book, the Green Executive. So why is this such a big issue?
Well look at the diagram below (taken from The Green Executive) which shows lifecycle carbon emissions for a variety of generic products - computer, car, food and washing powder - which:
Food is the only common example I could find where the emissions from the use phase (in this case cooking at home) don't dominate the lifecycle. In the case of food this is because of the huge amount of energy required for fertiliser, pesticides and irrigation. But for the other three, the biggest element of the emissions is in the hands of the user.
The washing powder data above came from Procter & Gamble and was the evidence that drove them to create Ariel Excel Gel which allows washing at 15°C - a massive potential improvement in lifecycle emissions. But that improvement hinges on the consumer being able/wanting to wash at that temperature. First up, my A+ rated washing machine doesn't have a 15°C setting and secondly, (on the rare occasions I put a wash on) I'm forever turning the dial from 40°C down to 30°C - the fairies turn it back up when I turn my back. Marks & Spencer may have run a massive "Wash at 30°C" campaign on their clothes, but there is a residual feeling amongst many consumers that warmer = cleaner.
So you can (and must) enable greener behaviour, you can (and must) inform the consumer/customer of the benefits, but that's often not enough to actually change their behaviour. We'll look at that in part 2.
I spotted this billboard for a Hi-tec walking boot a few months ago and I used it on Wednesday's Green Marketing webinar as an example of how not to do green marketing. I am both a green consumer and a keen rambler, so I am a prime target for this product and its marketing message, yet it left me cold.
The obvious flaws are the uninspired imagery and the lack of any justification for the claim that this boot is in anyway greener than normal boots - and with rivals as ambitious on sustainability as Timberland, they'd need have to have a good story to tell.
But the real damage is done by that incredible strap-line:
"The environmentally considered walking boot".
Urgh! Apart from the dodgy grammar, and its sheer clunkiness, it means nothing. Where's the wit, where's the insight, where's the passion? Did someone actually get paid to produce this?
In sustainability maturity model (above) that sits at the heart of The Green Executive, one of the five key requirements to create a truly green business is the alignment of all processes and procedures to sustainability. This must be the easiest said, hardest to do parts of the whole book.
That's why all of part 3 and much of part 4 are dedicated to this topic - how to get "green" out of the environmental silo and embed it everywhere. And by "everywhere" I mean everywhere: operations, the supply chain, products/services, the entire business model and all the supporting processes like accounting and HR.
One of the trends picked up in the Green Executive is how the cutting edge businesses are going about this. Instead of just creating a green range of products, they are embedding sustainability into their entire product range, deleting those that don't make the grade. Instead of simply adding some green criteria to purchasing decisions, they are building the supply chains they need, discarding suppliers who don't make the grade. In some cases they are redefining the traditional producer/supplier distinction through industrial symbiosis (using other's waste as a raw material) and product takeback (using your own post-use product as raw material), or even the traditional business model through product service systems.
This approach doesn't ask "is X feasible?", but asks "how can we make X feasible?". That's a huge mental shift on both the individual and the organisational level, but to deliver corporate sustainability it's an essential one.
For years those of us in the green consumer niche have been conscientiously buying eco-products from Ecover, Bodyshop, Natural Collection etc etc - and feeling very self-righteous for doing so. Only problem is, we only represent 5-15% of consumers - the rest are either oblivious to green products or are actively suspicious of them, believing that they'll be expensive and won't work.
To achieve sustainability, we need every company to be a green company and every product to be a green product. There are two routes to this goal. The first is to try to persuade the 85-95% majority of consumers to 'see the light' and start buying green(er) products. Just one problem - go and stand in the middle of your high street or local megamarket, even in these economically straightened times, and watch how much and what people buy - how on earth are you going to change all their minds?
The second approach is to green mainstream products without asking the consumer's permission. Take Procter & Gamble, owners of the Ariel (UK) and Tide (US) brands. They launched a green range of household products in the 1990s but they didn't sell so they withdrew the products. Now P&G are re-engineering mainstream products to deliver on performance, price AND planet. Look at Ariel Excel Gel (aka Tide Coldwater) above - the packaging barely mentions the environment but check out that 15°C on the front - that makes it arguably much greener than the Ecover equivalent. Oh, and it was rated best clothes washing product ever by Which? magazine.
Or take Marks & Spencer who are producing mainstream products made of recycled PET like my umbrella (right). Again, I could have bought this without realising it was an 'eco-product' - it's just an M&S brolly and it does the job as well as any other.
This mainstreaming strategy is clearly the best way to get most people buying greener products. From the consumer's point of view it has a great additional benefit - it forces the producers of such products to deliver on price and performance too as they can't rely on the niche paying a premium price or tolerating mediocre performance. This banishes complacency, drives innovation and brings sustainable products to everyone - whether they want a 'green' product or not.
So, I would argue, the eco-product is dead, long live the eco-product!
From July, Green Academy splits into two streams so there will be two sessions on 6 July:
11:00 BST An Introduction to Green Business - a free taster session covering the business case for sustainability, business and sustainability, a selection of inspiring case studies and some information on The Green Academy. E-mail us to register for the session.
14:00 BST Advanced: Green Products and Services - the sixth in the series covers the power of redesign of products and services. Contents include:
Benign by design - the case for changing products and services;
Understanding the market.
Practical techniques to green your product or service;
Advanced innovations (product service systems, virtual products etc);
Finding green market niches for your business in the emerging low carbon economy.
Inspirational case studies.
The advanced session costs just £45.00 + VAT per person to participate - use the button below to pay by card or Paypal. Contact us to make a BACS payment.
"Gareth's webinars are smart, punchy and thought provoking. His approach shows how sustainability is about achieving commercial advantage and not simply an altruistic gesture. Highly recommended." Graeme Mills, GPM Network Ltd.
"[The webinars] are great value and I would recommend them to both CSR professionals and SME owners." Louise Bateman, GreenWise
"I consider this a must for organisations looking for practical help in improving their sustainability performance." Ted Shann, Wipro
One of the main trends I identified in my new book The Green Executive is the shift from 'green' being the exception to it becoming the rule. Examples include:
Redesigning mainstream products to be green as opposed to launching a green range (which is so 1990s);
The killing off of products incompatible with sustainability objectives;
Environmental objectives put into all managers' job descriptions rather than being the sole responsibility of the environmental manager;
A shift in emphasis of the role of green teams from delivering sustainability to facilitating sustainable behaviour in others;
The integration of sustainability strategies into business strategies (and vice versa);
Rebuilding supply chains to deliver sustainable goods and services, de-listing suppliers who don't make the grade;
Showing leadership amongst peers, disassociating themselves from organisations with a regressive attitude to the environment and even calling for stricter environmental legislation.
The implication of this shift is that directors and senior managers must have a good grasp of sustainability issues, how they impact on the core business and the range of solutions available. Which is why I wrote the book!
My partner bought this bottle of wine at Marks & Spencer at the weekend. If you look carefully at the pic, you'll see that the bottle is made of plastic.
This is great from an environmental point of view. Glass is heavy, leading to increased emissions during transportation. While it is recyclable, here in the UK we import huge quantities of green glass in the form of wine bottles, but we don't have the need for it in our own packaging industries leading to a geographical imbalance. The plastic bottle is made of 25% recycled content and could either be recycled locally into a different form or exported much more efficiently.
So what's the hitch? Well, frankly, it feels a bit odd pouring decent wine from a plastic bottle. It squeezes in your hand and you don't get the same impression of quality that the solid heft of a glass bottle gives. So it may take some time to get used to it.
Wisely Marks & Spencer have chosen to market the bottle as "shatter-proof" and particularly suitable for outdoor dining - turning the potential negative into a positive. This gives them a chance to get the product out into the market and get people used to the new way of doing things. A sensible tactic worth considering for any green product.
BTW: Marks & Spencer and their Plan A sustainability programme feature in my latest book, The Green Executive.
Sustainability story of the day must be Marks & Spencer's launch of a carbon neutral bra, knickers and suspender belt set - certainly taking the hair shirt out of corporate social responsibility. Interestingly, the most popular news story on last month's edition of The Low Carbon Agenda was that the WWF had signed up a top lingerie model as an ambassador. One of my favourite quotes is from Ashley Lodge of Harper Collins who said their staff engagement strategy is "more stilettos than sandals". Has the sustainability world gone sex mad?
The oldest marketing maxim in the world is "sex sells" - and sustainability is no different. And why shouldn't sustainability be sexy? The industry has a tendency to fear that "sexy" can mean "sexist" and that all communications have to be worthy and dull.
But when you're trying to catch someone's attention - the average joe, not a treehugger - ranting at them doesn't work, being boring doesn't work, being smug doesn't work, and a pair of hands cupping a sapling certainly doesn't work. You have to really grab them - and sex is one way of doing that. Marks & Spencer know that carbon neutral suspenders will gain more column inches in the mainstream media than carbon neutral socks. WWF know that a top lingerie model will get more attention from non-greens than, say, Jonathan Porritt (no offence, Jonathan). It works, so why not?
Can you put a bit more va-va-voom into your sustainability programme?
Back in the early 1980s, I persuaded my parents to part with the princely sum of £399.00 for a BBC Micro Model B. My initial reaction was to feel a bit let down - all that white-heat-of-technology talk around home computers and the best thing this one could do was putting you in charge of a crudely realised kingdom with a river, fields and mountains (at least until Elite came out, but that's another matter...). At today's prices, that £399.00 could buy you four, yes, four, iPhone 4 handsets, each with about a million times more processing capability and a cornucopia of sci-fi type technology (video, maps, access to vast stores of information) that the 11 year old me would never have dreamed of.
So what has this got to do with green business? Well it demonstrates a number of basic economic principles - new technology starts off expensive until a mixture of economy of scale and innovation makes it accessible to all. But reading some accounts, you would think that renewables, to take an example, were exempt from this rule. "They're too expensive" we keep hearing. Only because they are the exception, rather than the rule. Already, with demand increasing and manufacturing shifting to China and India, prices of solar panels and wind turbines are starting to drop.
By the way, I'm not saying that offshoring manufacturing is a good or bad thing per se, just that once again, in the economic world we live in, that's what happens and we shouldn't be surprised if it does.
Demand also derives technology improvements and recently we have seen breakthroughs in dye-based solar PV technology which could deliver lower costs, higher efficiency and lower carbon footprint. Likewise, electric vehicles are currently expensive, but that's because the extraordinarily lean supply chains that supply conventional vehicle manufacturers have not been built for electric vehicles yet. One manufacturer told me that an extra 1000 vehicles a year would cut his bill of material costs by 40%. 45% of the cost of an electric vehicle is the battery, so, given the innovations in mobile phone battery technology, we will eventually see massive improvements there.
The flip side of this is true too. I once sat through a presentation on a new biodiesel plant for the North East of England. I asked whether it would take waste oils as well as rape seed oil, but the presenter said that to make the economics of the plant would only stack up if they produced pharma-grade glycerol as a by-product so they needed to be very tight on the quality of raw materials. His company later went bust, allegedly because putting that amount of high grade glycerol on the market depressed the price. More supply, same demand = lower prices. Welcome to the real world.
I also have little patience for those who complain that environmental legislation or corporate social responsibility will cost business or the economy money. Hold on, what's a cost? It's an income for someone else in the economy - it's not lost. Environmental legislation protects the world we live in and creates new markets. What's not to like?
Whether or not you like the economy we live in, we live in it and that's a fact. If you run, or want to run, a green business, you'll quickly find you're not exempt.
The other evening I watched The Road, the post-apocalyptic movie based on a novel by Cormac McCarthy. The plot involves the attempt by a father and son to escape an unnamed catastrophe which has killed off every living thing except people. Survivors have either turned cannibal, or, like the father and son, scavenge for tinned food amongst the wreckage of small town America and the dead forests of the surrounding countryside.
Not a bad film, but portraying such utter dystopia leaves me in two minds. The first thought is that it was a powerful reminder that we rely on the eco-system for all our essentials, one which we often forget as we in the West spend most of our time inside and increasingly on-line. If it goes we go. But this is balanced by the nagging thought that this kind of "it'll be our DOOM!" type message is misleading and off putting to the general populace. The earth will recover from climate change, but in its own time. The big question is whether society can continue to thrive in warming world.
You can see this problem in the slight repositioning of many of the climate change denial brigade. They seem to have invented something called 'catastrophic anthropogenic global warming (CAGW)' which the rest of us apparently believe in. I assume the introduction of the word "catastrophic" is to give them wriggle room as the fundamental science of climate change stands up to the huge scrutiny put on it over the last year. We might have melting glaciers, disrupted weather patterns, floods, droughts and heatwaves - but if the result doesn't look like The Road then they'll claim it was all exaggerated (tell that to the people of the flooded Sind province of Pakistan).
It is becoming a cliché, but we really do need a more positive view of sustainability and the low carbon economy. I believe this vision needs to go further than the 'green jobs' that politicians fall back on. What about vibrant cities full of pedestrians, cyclists and urban greenery? What about people working from home, cutting crime in their neighbourhoods simply by being there, revitalising the local economy and getting to know their neighbours? What about holidays on high speed rail bringing back the romance of travel? What about being able to park outside your house because no-one needs a second car?
And for business? The same positive vision needs to be applied both inside and outside the business. Companies need to lead on this agenda and develop those products and services that are not just green in themselves, but that go further and help other people cut their emissions and improve their lives. I saw a TV ad for Hitachi at the weekend that showed the difference that their technologies - from high speed trains to data centres - could make to carbon emissions. It was great, positive stuff and no hand wringing or hair shirts in sight. That's the future I want.
When I speak in public, I like waving tangible objects (aka 'realia') around to break up the dreaded monotony of Powerpoint slides. At the LloydsTSB event last week I used two different clothes washing products to illustrate some points. The thinking behind the two products, Ecover washing liquid (the picture shows fabric conditioner, but humour me) and Ariel Excel Gel, comes from two completely different perspectives, so I thought it would interesting to share.
Ecover is the archetypal 'green product' and is branded as such with all those trees and blue skies. It is made completely from natural, biodegradable materials in a solar powered factory in Belgium. It is branded green and does its job pretty well, but not as good as a mainstream product in my experience. So effectively Ecover is asking the consumer to accept a compromise on performance in return for a lower environmental impact. The caveat is that it contains palm oil so there are question marks over how sustainable the sourcing of the raw materials is in reality.
Procter & Gamble, who own the Ariel brand, tried the Ecover approach in the 1990s, producing a range of branded green products, but they failed in the marketplace. So instead they adopted a 'no-trade offs' rule - their products had to compete on price, performance and sustainability. They also took a life cycle assessment approach, identifying the energy used in the washing process and the extraction of raw materials as the key issues. The result is Ariel Excel Gel, recently named the best clothes washing product Which magazine had ever tested. Its gel nature means it is compact (ie it uses fewer raw materials) and that the user is more likely measure out the correct amount compared to a powder or liquid. But the big breakthrough is that it can work at 15°C, halving the amount of energy used in washing clothes. It is not branded green - just the 15°C on the front and a web URL for more info on the back.
Which is better? That's a difficult question to answer. Apart from the palm oil issue, Ecover is probably more green (being almost solar, cyclic, safe*), but the user takes the hit in performance, meaning that it is unlikely ever to escape its green consumer market niche. The Ariel product takes an eco-efficiency approach* and it gives the user the opportunity to use less material and a lower wash temperature, but its green credentials are dependent on that consumer behaviour (the temperature dial on my washing machine creeps magically upwards over time). Its excellent performance and mainstream branding means that it is a mass market product, so if that shift in consumer behaviour does happen in practice, Ariel will probably have a bigger positive impact.
* If you want to know the difference between solar, cyclic, safe and eco-efficiency, check this video out.
Running a green business is tough. I have seen many people get bitten by the green bug and then just get bitten. I have seen green product manufacturers use self (badly) printed labels on their products and not understand why they break into the mainstream. I've seen a recycling technology developer wonder why local authorities wouldn't buy his hugely expensive sorting machine. I've seen a recycling company try to jump ahead of the pack with a new processing line then lose money when the Government delayed a piece of legislation.
US green marketing guru Jacquelyn Ottman talks about the 'Green Graveyard' where poorly thought out products go to die. It is a repository for all ideas that aren't rooted in the real world. In the real world:
Mainstream consumers want smart looking products in smart looking packaging.
Local authorities want cheap, reliable technologies.
Political pressures can lead to unexpected changes.
A smart businessman or woman knows they have to work in the real world, acknowledges the realities, and plans accordingly. Being green won't cover up for poor business acumen. But add green and strong entrepreneurial skills together and you're on to a winner.
I commented a few weeks ago on the car industry going green to beat the recession. Well last week I saw some evidence that retail, another sector said to be on the brink, is trying the same tactic. John Lewis had given two windows over to green products, clearly believing that this sets them apart from their competitors.
Of all the industries in trouble, the car industry seems closer to the edge of the cliff than any other. Yet the Geneva Car Show had almost every major motor manufacturer showing off their latest green options. From the new Prius hybrid to Peugeot's diesel hybrid to GM's new electric vehicle (oh, the irony) to VW's Eco-motion options, it is very clear that they see green as a route to survival.
There are a number of image benefits for the car companies:
- to be seen to be part of the solution rather than part of the problem - to be seen to be part of the future rather than a relic of the past - to try and corner new and future markets however small they are at present - to tap into the 'new frugality' public feeling that has come with the recession - to sweeten the pill of Government intervention by demonstrating 'societal' benefits
But whatever the motives, there is a clear message that 'green' won't only survive the economic crisis, but it may even be a lifeboat for this and, by extension, many other business sectors.
...is that the environment and sustainability can only be addressed when there is plenty of money about.
Let's be blunt - the current economic situation is good for the environment - we are driving less, insulating our houses more, and are likely to buy less tat with which to disappoint our loved ones on Christmas Day. But saving the world shouldn't be about living in poverty.
On a business level, there are two proven ways of surviving an economic downturn. One is to cut unnecessary costs, the other is to innovate.
It constantly staggers me that companies immediately try to cut staff costs. OK, if you have far too many people standing about doing nothing, then you should have already got rid of them. But if you cut your workforce, you cut your ability to respond to the inevitable upturn when the recession ends. The same people see waste and utility costs as a fixed cost of doing business which is complete nonsense. And with the true cost of waste being about 10 times the cost of disposal, there are massive cost savings to be made which will make your business more productive, not less. We found an average of £175k pa savings in 26 businesses in a raft of industries - and you don't have to make redundancy payments for waste.
Turning to innovation - it is well known that markets for green products are expanding fast and, in some - say white goods or baby food - the eco- end of the market dominates the 'conventional' by a factor of 3-4:1. Other sectors will follow, if they get the quality and labelling issues right more than anything else. Is it a surprise that the new electric Mini has just been launched when the big 3 US car companies are staring the grim reaper in the face?
The sustainability agenda does have the scope to help a business through the economic downturn. It's a pity the myth makers don't understand that!